Property companies (propcos) and high-net-worth investors helped Wales buck the wider UK trend and deliver a positive second quarter for investment in commercial property, according to new figures from Knight Frank.
Analysis from the independent commercial property found that just shy of £72 million was invested in Welsh commercial property between April and June – up 67% on £43 million during the same time last year and the highest since 2022’s £103 million.
Private investors – predominantly made up of propcos and high-net-worth individuals –accounted for 61% of investment in the first six months of the year, well ahead of international buyers who were the next most active group at 21%. That was also far above private investors’ average market share of 24% between 2020 and 2025.
French open-ended commercial property funds known as Société Civile de Placement Immobiliers (SCPIs) made up the vast majority of international investment. They were behind the purchases of Kestrel House in Cwmbran and 5-10 Church Street in Cardiff, home to well-known restaurant chains The Botanist, Honest Burger, and Mowgli.
The second quarter’s strong performance was buoyed by the sale of Hodge House in Cardiff to SevenCitiesLdn. Outside of the capital there were just under £22 million of deals, largely for industrial and warehouse units in South Wales, including the sale-and-lease-back purchase of the AF Blakemore distribution centre in Talbot Green acquired by an SCPI.
Tom Griffiths, associate at Knight Frank Cardiff, said: “Private buyers are driving investment in the Welsh commercial property market this year, representing not far off two-thirds of volumes. They have stepped in where international buyers have left off for the moment, as the geopolitical situation softens the appetite for cross-border deals across the UK. These buyers see a mixture of opportunities for value-add purchases and long-term income from strong covenants, with funds often the sellers.
“That said, French SCPIs have remained very active and were behind a number of the largest transactions in the last quarter, with a particular interest in Cardiff’s leisure offering. They are attracted by the value on offer – as they often look for yields of 7% or higher – clean assets with little asset management requirements, and the fact they can find investments that meet those criteria in a capital city makes Cardiff stand out.
“In industrial, rents are still behind the curve and the supply of quality space remains relatively constrained, creating a reversionary story that many buyers are leaning in to. That should help to sustain deal activity in the sector during the months ahead. Another emerging trend we are beginning to see is a shift back towards income‑focused buyers who want longer, steadier income streams.
“While the geopolitical situation and economic outlook will likely continue to loom in the second half of the year, Wales’s market dynamics remain strong. Limited supply, both in Cardiff offices and South Wales industrial, should continue to keep prime rents on a positive trajectory, and we would hope to see that translate into more deal activity in the remainder of 2026.”
